As the government shutdown enters its second month, the pressure on President Donald Trump to make a deal is growing. But the battle over government funding could put the president in a tight spot.
Trump has long toutedthe relative strength of the US economy as one of the major successes of his presidency, crowing about better-than-expected GDP numbers and gains for the labor market. But now Trump’s demands for border wall funding could put the strength of the economy at risk, unless the president can find a way to cut a deal.
According toa growing number of economists, the ongoing government shutdown is taking a bite out of the US economy. Even theWhite House projects that the shutdownwill shave 0.13 percentage points off first quarter GDP growth for every week the closure continues.
In fact, according to an analysis by S&P Global, the cost of the shutdown willsoon eclipse the $5.7 billion Trump is demandingas a down payment for the wall. Even more stark are warnings from economists thatfirst quarter GDP could actually gonegativeif the shutdown continues into March.
Trump could end the economic woes at any time by signaling a willingness to delay the wall fight and sign bills reopening the government that do not include the border wall money, as Democrats have advocated. The president first sparked shutdown concerns in late December bysuddenly changing his mindon a funding extension thatdid not include border wall funds.
But much like the initial plan to push the wall fight off, any move to open the government without border wall money would likely drawblowback from hardline conservativesand pundits, the same people whoseemed to convince Trumpto shut the government down in the first place.
So it would seem Trump has a choice. He could A) stand firm on the border wall funding, please the most vocal part of his base, and risk hurting the economy or B) give in on the border wall, anger his base, and ease the pain on the economy.
But it does appear that there could be a third way Trump could go: actually make a deal.
The president seemingly made an attempt at this over the weekendwith a plan presented on Saturday. But the idea — $5.7 billion for the wall in exchange for a three-year extension of protections for people under the Deferred Action for Childhood Arrivals (DACA) immigration program and extension of other immigration protections — was roundly rejected by Democrats.
Asimmigration experts and critics pointed out, Trump is offering an extremely limited set of protections in exchange for a permanent wall. Democrats also blasted the idea as grandstanding since Trump had already made a similar offer and was already rejected.
But Rep. James Clyburn, the third-highest ranking Democrats in the House,seemed to offer some way forwardon Sunday. The South Carolina Democrat suggested that “a permanent fix” for the Deferred Action for Childhood Arrivals (DACA) immigration program in exchange for border wall funding could make the foundation of a deal.
Where the talks go from here is unclear, but the economic concerns and disruptions caused by the shutdown seem to be pushing Trump toward the negotiating table.
But if Trump fails to reach a deal with Democrats, the president faces a choice: continue to play hard ball and risk the short-term economic health of the US or face the wrath of conservative advocates by pushing off the border wall fight.